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New Tariffs and Crypto: What's Next?

Explore the impact of recent tariff decisions on global markets, inflation, and cryptocurrency. This insightful analysis delves into the potential domino effects of economic policies, opportunities for strategic investments, and the evolving role of crypto as a hedge against inflation and trade barriers. A must-read for investors and market enthusiasts looking to stay ahead in uncertain times.

Category: News
Publish Date: 2025, April, 8

Reading the Signs: What the Charts Were Telling Us All Along

It's incredible how many times charts have predicted situations. You don't know precisely what will cause it, but you see signals and a picture that's hard to believe. Nevertheless, I'll repeat once again. I told you (see post here: https://t.me/techhypov/4579?single).

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New Tariffs and Crypto: What's Next?

It's incredible how many times charts have predicted situations. You don't know precisely what will cause it, but you see signals and a picture that's hard to believe. Nevertheless, I'll repeat once again. I told you (see post here: https://t.me/techhypov/4579?single)...

The forecast has fully materialised, and now it's time to take out the crystal ball and see what happens next.
First, it should be noted that such stock market declines aren't particularly rare.

Reflecting on historical data, we've witnessed substantial corrections in the strong bull trend in 2020 and 2022, with declines of 35% and 27% respectively. The current decline from peaks stands at about 22%, suggesting a potential drop in the SPX index to levels of 4600 - 4200. This presents a significant opportunity for strategic investment, instilling a sense of optimism in the market.
Anticipating a market correction, this could be an excellent zone for buying, potentially leading to a short-term bounce. This optimistic perspective is crucial for investors, providing reassurance about potential opportunities in the market.
As practice shows... Trump's harsh rhetoric doesn't always match actions. New tariffs for all countries worldwide are just a reason to start dialogue and start it as soon as possible.

Trump's tariff decision isn't as crazy as it seems at first...
Considering the US's substantial trade deficit and national debt, the decision to increase tariffs and reduce taxes is a strategic move. This could attract significant investments to the country in the medium term and boost the demand for the US dollar. However, it's important to note that this could also lead to a sharp rise in inflation worldwide, impacting not just the US but also other countries heavily involved in global trade.
The negative side of this decision will be a sharp rise in inflation worldwide. The increase in tariffs will inevitably affect the final price of goods. 
Moreover, prices will rise both for imported goods and domestic production. Another negative aspect is the strong impact on US productions that are heavily dependent on imported raw materials and components. Companies that are heavily involved in exporting their products to the US will also experience a severe blow.
High inflation on one side indicates the need for rate hikes. Stagnation and default conditions of manufacturing enterprises will require immediate rate cuts. This situation will affect not only the US but dozens of other countries.
There's no doubt that the US, as an economic hegemon, will cope with the stress and emerge victorious. However, the same cannot be said about other countries.
Corporate debt defaults will pull along defaults in the banking sector, and then entire nations. A domino effect will occur.

The default of one state can trigger a global economic crisis and prolonged economic depression.
Conclusion - There won't be a trade war
Trump is much smarter than many try to portray him. He doesn't need a trade war with the entire world; he needs US economic growth, investment inflow, and budget replenishment. This perspective instills hope and optimism about the potential positive outcomes.
Trade war is more of a headline than a reality. I'm confident that the dust will settle, and tariff decisions with many countries will come down to compromises. Most tariffs will be reduced or canceled altogether.
The risk is that it might be too late, and the wave of bankruptcies might begin before the tariff situation normalizes.
What about crypto?
Here, the situation isn't so straightforward, with several opposing factors at play. Negative factors:
👎Negative factors:
Stock market falls always trigger risk-off mode among institutional investors, and high-risk assets are the first to be cut. Cryptocurrency is directly related to such assets. Crypto selloffs amid general panic are inevitable.Households and small investors without sufficient safety margins will start dumping cryptocurrency when problems with business, work, and family income begin.
👍 Positive factors:
Cryptocurrency circulation has no borders and strict control. With tariffs rising worldwide, it will become an ideal tool for paying for contraband, bribes, and other schemes to bypass customs barriers.
Against the background of galloping inflation and local currency devaluation, cryptocurrency might become a refuge for populations of entire countries. Venezuela is a perfect example, where Tether has essentially become a second national currency.

The key level for Bitcoin is around 72,000 USD. If we can defend it, we'll get off with a slight scare and might see a retest of historical maximums in the second half of 2025. This scenario remains the main one and matches well with the idea that Trump's tariff threats will work quickly, and there will be a partial rollback to previous positions.
If 72k breaks and we go lower, the picture will significantly worsen. I won't detail it now to avoid premature panic and maintain intrigue...
P.S. Market panic is an excellent moment to pay attention to projects that feel confident and don't fall along with the entire market. I'll dedicate the next article to analyzing several such projects.
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